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The 8% Problem Nobody Fixes
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Sandino ScheideggerÜbersetzt aus demEnglischen
Sending cash to sub Saharan Africa costs close to 8%. The UN promised to get that number under 3% by 2030. Fifteen years in, it has barely decreased.
To put it in scale: migrants sent roughly 685 billion dollars as remittances to low and middle income countries in 2024, more than three times what the rich world gave in aid. The gap between the UN's goal (SDG 10) and the reality is around 23 billion dollars a year, sitting with financial institutions instead of people in need.
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United Nations
Another way to look at the 8% remittance fees:
“A tax on the poor”
A tax that is still being collected. The 8% figure mostly reflects what big remittance companies like Western Union and MoneyGram charge an individual sending money from the Global North to the Global South.
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von Aurélie Schmiedlin (Social Income Journal)
For an NGO, the picture is the same. We depend on a few actors to send money to the Global South, with extra services needed like batch payments and currency exchanges due to donations coming from all corners of the world. In our case, we have donations from 67 different countries that are paid out to 3 different countries in West Africa.
Bad and Good News
The bad news first. The players inside the system have no reason to push the price down. Why would they? The system pays them to leave it alone.
The good news is that competition is starting to show up. New entrants are making the path shorter and cheaper. The catch is that most of these tools are built for individuals sending money to their families, not for NGOs that need to push thousands of small payouts at once.
From a distance, stablecoins look like the obvious next fix. USDC and USDT settle in seconds for almost no fee. But look closer and, for now, the fix only covers the middle of the journey, the part where money crosses borders. Both ends of the chain are still expensive.
At the start, donors don't pay in stablecoins. They pay with a credit card or a bank transfer. That means a card network, a bank, or a payment processor like Stripe sits between the donation and us, and each of them takes a percentage. At the other end, the money has to become spendable. Local markets don't accept stablecoins, so they first have to be converted into local currency before they can land on a mobile money wallet. Someone has to make that exchange, and that someone charges for it too.
So no, stablecoins don't solve the entire fee problem yet. But they make the step between countries cheaper, and that's a start. Every percent shaved off in fees is money that reaches the people it was meant for.
Sandino ScheideggerWeiterlesen
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Sie geben es doch nur für Alkohol aus
Sandino ScheideggerIn einer Reihe von 30 Studien auf drei Kontinenten wurde untersucht, was passiert, wenn arme Familien Bargeld erhalten.
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Fünf hartnäckige Mythen über Geldtransfers
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Social IncomeMöchte man tatsächlich etwas verändern, ist das erste Hindernis nicht die Arbeit selbst – es ist der Kampf gegen die klassische Redensart: „Aber das haben wir schon immer so gemacht“.
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«Papa, warum sind manche Länder arm und andere reich?»
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Sandro StübiEine einfache Kinderfrage, ein komplizierter Vater und viel Forschung. Nachdenken über Geschichte, Institutionen, Geografie und Ideen.